The right and the wrong way to think about cellphone unlocking and DMCA anti-cirumvention

In a recent blog post Scott Cleland endorses the Administration’s stance that the DMCA should be reformed to accommodate, as he puts it, “pro-competitive exceptions that consumers who have fully paid for the phone and fulfilled their legal and contractual obligations, of course should be able to use it with other carriers.” As he deftly explains,

In a nutshell, if one has honored one’s legal obligations to others, one should be free to unlock their phone/property because they indeed own the lock and the key. However if one has not honored one’s full-payment and legal obligations to others, one may have the phone in one’s possession, but one does not legally own the key to unlocking all the commercial value in the mobile device. Most everyone understands legally and morally that there is a huge difference between legally acquiring the key to unlock something of value and breaking into property without permission. The core cleave of this cellphone issue is just that simple.

I couldn’t have put it better myself. There is a key distinction to be drawn between two very different conceptions of “cellphone unlocking.”

One is the principled view, based on respect for property rights and contract law. This view opposes the DMCA’s anti-competitive circumvention provisions, but leaves contract and property rights untouched. It respects contract law because it recognizes that even though you may own your cell phone, you must live up to any contractual obligations you have undertaken. It also respects property rights because it recognizes that once you have satisfied your contractual obligations, there should be no additional legal impediment to your full enjoyment of your device. That’s why we need, as Cleland says, “pro-competitive exemptions” to the DMCA. In this he rightly echoes Tim Lee’s excellent 2006 Cato Institute paper.

The other conception of “cell phone unlocking” is a weird one. It’s that consumers should be able to buy a cheap subsidized phone from a carrier, and then have the right to walk away from their contract to go to another carrier without having to face any penalties. It means limiting the kinds of agreements into which consumers and carriers can enter. This is a view of cellphone unlocking that would eviscerate contract law. Such a rule would be not just wrong on principle, but it would also be bad for consumers who would soon find that they no longer had access to subsidized phones.

It’s an especially weird view of cell phone unlocking because, while it seems to be “in the water” in the current debate, I can’t find anyone who has actually made such a proposal. (If you have any such examples, please drop links to them in the comments!) The White House specifically ruled out such a view of cell phone unlocking in their response to the user petition. The bill just introduced by Sen. Wyden seems to just codify the DMCA exemption that was not renewed in January, so it just puts us back to the state of affairs we had a couple of months ago. And here’s how Politico describes the forthcoming bill from Rep. Chaffetz:

The contours of legislation are still being crafted, but the bill could carve out an exemption to the Digital Millennium Copyright Act rules that would make it OK to unlock a cell phone even if the owner is still under a contract with a carrier. Breaking the contract would likely still carry whatever penalty the carrier contract dictates, but the action, if the bill is indeed drafted that way, would no longer be a criminal offense.

The word “likely” in that quotation gives me pause, but I can’t imagine that Rep. Chaffetz intends to upend contract law. So, I think we can chalk that up to early reporting until we see a bill. The rest of the report makes sense. As long as you honor a contract you’ve entered into—either by maintaining service with your carrier or paying the early termination fee—you should be able to unlock your phone at any time so that you can, for example, take it overseas or maintain service on two carriers for redundant coverage. You would not be making the carrier any worse off by your additional use of your phone. And breach of contract should never be a criminal offense.

No one today is seriously making the retrograde and seriously debunked case for “wireless net neutrality.” As I pointed out yesterday, the present debate is not about telecommunications policy, it’s about copyright. We need to be on guard that it stays that way. To underscore the point, the debate should actually be about more than just cell phones. I’d like to see Rep. Chaffetz, Sen. Wyden, and others expand their bills to tackle anti-circumvention more broadly.

Even though in his post he unfortunately makes some characteristically groundless assertions about people and their motives, Cleland is absolutely right to draw this distinction between a right to use one’s property within the confines of contract law, and a right to ignore contracts with others. As we move forward to reform the DMCA, we must make sure that we don’t replace one bad regulation with a worse one, and that we ensure that contractual obligations are always respected.